Positive Outlook for Seychelles Tourism Industry as Airlines Boost Flights

11 October 2017 Alex Havas, Research Assistant, Indian Ocean Research Programme

Background

The Seychelles tourism industry accounts for 24.8% of the country’s gross domestic product, and is of great importance to its future prosperity. With its natural beauty, the Seychelles is an attractive tourist destination and has a well-developed and implemented tourism strategy targeting key European markets. At this year’s recent Tourism Week event, key considerations were the impacts of climate change, the maintenance and development of environmentally-friendly tourism practices and how to develop greater employment opportunities. The accessibility of the holiday destination will be further boosted this year and next by the introduction of more non-stop flights. Austrian Airlines will launch weekly flights from Vienna on 25 October, British Airways will return to the Seychelles with seasonal flights from London on 24 March 2018 and the new Air France subsidiary, Joon, will begin operating year-round flights from Paris on 5 May.

Comment

Initially, the economy of the Seychelles relied on the agricultural sector, but it gradually evolved to a service- and tourism-based economy. The transition, however, only occurred quite recently. In 1979, France-Albert René became President and actively discouraged tourism as it was seen to be associated with British colonial rule. After surviving a number of coups, President René stood down in 2004 and was replaced by his Vice-President, James Michel. President Michel implemented a dedicated tourism strategy and, in 2005, the Seychelles Tourism Board (STB) was created. The board’s mandate was to develop policy and act as a statutory body to oversee the fledgling tourism industry. The vision for the Seychellois tourism industry was articulated in 2010 by President Michel as one of improving the “Seychelles brand”, increasing the participation of local business and labour in the industry, and of implementing quality assurance controls to protect the country’s reputation as a high-end destination.

The Seychelles is blessed with world-class natural features, including beautiful beaches, crystalline water, mountain backdrops, and a good year-round climate. Its excellent infrastructure and the leadership of the STB on strategy and governance have underpinned growth in the tourism industry, which has seen tourist arrivals increase from 122,038 in 2003 to 303,177 in 2016. Approximately sixty-three per cent of arrivals in 2016 – or 183,535 tourists – came from Europe, of whom 43,066 travelled from France. That year, just over 1,600 Australians visited the Seychelles.

The growth in passenger numbers travelling from Europe is predicted to increase with the introduction of the non-stop flights from Paris, Vienna and London, adding to those already operated by Air Seychelles (from Paris) and Lufthansa subsidiary, Condor (from Frankfurt). Non-stop flights reduce the average flight time between Europe and the Seychelles from thirteen or more hours to just ten. Already among the largest sources of inbound tourists to the Seychelles, the French, German and British tourism markets are some of the largest in Europe and the greater choice of non-stop flights should boost arrivals from those countries. The new flights may also appeal to east coast US and Canadian residents, who may consider travelling to the Seychelles with British Airways via Heathrow or with Joon/Air France, connecting at Charles de Gaulle Airport, rather than via the Middle East or Africa.

The numbers of travellers using carriers other than Air Seychelles from Europe will increase and a reduced market share could adversely affect the airline, which has only recently returned to a solid financial footing. The strategic partnership with Etihad Airlines has been hugely beneficial for Air Seychelles and should help to mitigate any fall in the number of bookings from Paris when the Joon flights begin.

Tourism contributes to 25.8% of direct and 59.9% of indirect employment, and demand for skilled labour from growth in the hospitality industry and associated infrastructure development will bring more jobs. In addition, the Seychellois Government seeks to capitalise on the expansion in tourism by reducing potential economic “leakages and inefficiencies” and improving the net economic value of the industry. Examples of plans to improve employment include the Seychelles Tourism Academy’s partnership with the Constance Hotel Group to train more Seychellois for future employment with the hotel chain and a Memorandum of Understanding with Air Seychelles offering traineeships and placements to increase the number of Seychellois working for the airline.

By implementing a strategy that draws more visitors to the Seychelles, combined with improving the net returns from connected industries, the future of the tourism sector is looking positive. Further efforts could be made to target Asian markets such as India, which is relatively close and already have shown interest in travelling to other islands in the region such as Mauritius (in 2016 only 10,916 Indians travelled to the Seychelles compared to 82,670 who visited Mauritius).

In the long term, however, the Seychelles tourist economy will also be confronted by the impacts of climate change on the natural environment. The country’s appeal as a tropical paradise holiday destination may be reduced as a result. In 2016, coral reefs in the Seychelles suffered catastrophic consequences from the El Niño weather phenomenon which resulted in the coral coverage of reefs being reduced from fifty to just five per cent. Further damage to its pristine natural features from sea level rise (less than 16.4% of land is above 4.8 metres and sea levels are expected to rise by 2.5 metres in 2100), landslides, and a greater occurrence of extreme high tides damaging coastal fringes is also predicted.

In the medium term, however, improved air travel connections and initiatives to increase the net economic value generated from tourism will result in growth in the industry and employment. By improving its market diversification and targeting other regional high population centres such as India, they could also reduce the potential impacts from fluctuating numbers travelling from Europe.

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